New Delhi, April 22 -- For long, Indian retail investors operated under a comforting premise - that domestic growth, strong savings, and limited direct global exposure would shield portfolios from global volatility. That premise is increasingly untenable. Indian retail portfolios, long seen as insulated by domestic growth stories such as consumption and banking, are now firmly in the grip of global economic currents. What appears to be a local market is increasingly shaped by global forces.

The data tells a consistent story. Retail participation has surged, with more than 100 million demat accounts, while the top 10 stocks account for roughly 45% of the Nifty 50. At the same time, correlations between the Nifty 50 and the S&P 500, typica...